Strategic entrepreneurial response of small and medium enterprises in developing economies

Abstract

This study examined the influence of three dimensions of strategic entrepreneurial response, namely market orientation, entrepreneurial orientation and networking capability on SME performance necessary for firms to face challenges in competitive environments. The research confirmed positive influence of the three dimensions of strategic entrepreneurial response (SER), namely market orientation (MO), entrepreneurial orientation (EO) and network capabilities (NWC) on small and medium enterprise (SME) performance. The dimensions of SER explained a significant amount of variance (50.1%) in SME performance, with the largest amount (27.1%) of variance accounted for by MO. The findings suggest that emphasis on MO is a firm’s strategic choice to generate strategic information which forms a seedbed of opportunities from which entrepreneurial oriented firms identify and proactively seize to build competitive advantage. Contrary to previous studies, which emphasized that opportunity seeking behaviour is a domain of EO, this paper argues that MO is pivotal construct to the SER. This paper views EO as more driven by an advantage seeking behaviour rather than opportunity seeking behaviour as conceptualised before. With these findings, this paper suggest that sustained market orientation and entrepreneurial orientation cultures build opportunity seeking and advantage seeking behaviours, respectively crucial to create and sustain SME performance.